Economic turmoil bring investing opportunities

The uncertainties in the global economies and the rampant inflation in developed countries have also changed the landscape of wealth management and investing. It compelled individuals searching for a decent place to harbor savings to alter their approach to be more cost-efficient.

In 2020, the Investment Company Institute conducted a survey indicating the substantial decline in the expense ratio of mutual funds over two decades. In absolute figures, the expense ratio of mutual funds has plummeted by 50 basis points on average.
This trend was measured across all types of mutual funds. What’s more interesting is that the researchers found a simultaneous increase in their overall volume.
In a nutshell, it displays that the expense ratio of actively managed funds has equalized with the costs of the Index ETFs, which are historically considered to be passively managed assets. Which made professional portfolio management way more affordable for the retail investors.
Considering the ongoing uncertainties in the global economy and the geopolitical tension, we can foresee this trend will only get stronger over the following years.

In conclusion, the times of economic turmoil bring investing opportunities as well. It’s crucial to keep your finger on the pulse and your eyes open.


Risk Warning: The information in this article is presented for general information and shall be treated as a marketing communication only.  This analysis is not a recommendation to sell or buy any instrument.  Investing in financial instruments involves a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both an increase and a decrease in capital. Please refer to our Risk Disclosure available on our web site for further information.

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3 thoughts on “Economic turmoil bring investing opportunities

  1. Risk and opportunity are like the two sides of the same coin, where there are risk, the opportunities will arise. that’s why it is important to focus on the long term process and just like Buffet says, you buy when there is fear on the streets, and you sell when there is greed.

    1. Oh.. that is really nicely put. But I believe that risk considerably reduces, when skill comes into play. Take boxing for instance. It is a very risky sport. However, with more skill reduces risk.

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